25 May 2013

stephen_fincher

Congressman Stephen Fincher is a Tea Party caucus member on a mission from God. He wants to drastically cut food stamps for 47 million of our poorest citizens, and eliminate 2 million people from the program, most of them children and older people.

Fincher justifies this by quoting the Bible: “The one who is unwilling to work shall not eat.” (2 Thessalonians 3:10)

(Vladimir Lenin used that same verse for the Soviet Union’s slogan. “He who does not work shall not eat.” Evidently Fincher is a raving Communist.)

Food stamps are part of federal farm subsidies. Fincher himself has collected $8.9 million in farm subsidies, according to the Memphis Commercial Appeal. That’s what the government pays him to sit on his ass and not grow cotton on his 2,500 acres (4 square miles) of land in Tennessee. Indeed, Fincher is the second largest recipient of farm subsidies in Congress — and he wants to increase federal crop insurance by a whopping 9 billion dollars over the next 10 years. In one year alone, he collected nearly $560,000 in commodity subsidies — government cash payments used by farmers to supplement their income. Last year he collected a $70,000 subsidy check from the federal government.

Everything for him. Nothing for you. That’s the Christian way, as Fincher sees it.

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Fincher says, “The role of citizens, of Christians, of humanity is to take care of each other, but not for Washington to steal from those in the country and give to others in the country.”

In reality, the US government creates food stamp money out of thin air, simply by changing the numbers in the bank accounts of recipients. That’s also how the government creates money for the millions in farm subsidies that Fincher collects for not working.

The more a politician basis his bullshit on his supposed “Christianity,” the more you can be sure he is a greedy liar.

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Matt Taibbi has a Rolling Stone article that bounces between truth and nonsense, mainly because Taibbi still thinks that money is physical. Let’s help him out.

He starts with some truth:

Any time anyone starts comparing the U.S. federal budget to anything other than the U.S. federal budget, that person is automatically full of shit and should be instantly voted off the conversational island, if not outright beheaded.

Agreed. Then Taibbi’s pinball hits the nonsense pin…

Standard & Poor’s has already downgraded the United States once, and we’ve paid more than a billion in increased borrowing costs, thanks to delays in raising the debt ceiling last time around.

Huh? Anything a bond rating agency like Standard & Poor’s says about US Treasuries is meaningless. Also meaningless (to the US government) are “borrowing costs.” The Fed pays interest on T-securities, and chooses whatever interest rate the Fed likes. This has nothing to do with debt-ceiling charades in Congress. And there is no “cost” to borrow, since the Fed and the regular government both create money out of nothing, by crediting accounts.

Then Taibbi’s pinball hits the truth pin and the nonsense pin in rapid succession…

Comparing your family budget to the sovereign debt of the United States is like comparing two kindergartners tossing a paper airplane to the Apollo 11 mission. It’s an automatically bogus argument, which raises the question of why it’s made so often. In fact, the overuse of this loony household analogy just proves that when it comes to debt, nobody knows exactly what he or she is talking about.

Nobody? Speak for yourself, Mr. Taibbi. You base your claim on the Reinhart-Rogoff debacle. You think the Harvard hucksters made “an error,” and therefore, “nobody knows what he or she is talking about.” However, deliberate fraud is not an “error.” Reinhart and Rogoff lied in order to justify austerity. Just because you remain confused about this does not mean everyone else is too.

Then Taibbi hits the truth pin again…

When it comes to whether or not deficits matter, economic arguments are always crafted to fit the politics. The party in power almost always unapologetically engages in deficit spending, while the other party argues passionately against the evils of debt and deficits.

I’m glad that Taibbi said “almost always.” Both the Roosevelt administration in 1937 and the Clinton regime in the late 1990s suddenly developed austerity fever and cut the federal deficit, causing recessions.

Today both parties want more austerity. Democrats want it via tax increases, and Republicans want it via cuts in social programs.

And yes, politicians and professors always tailor their economic propaganda to suit the rich.

Today’s Republicans are predicting the imminent arrival of a giant Earth-smashing debt asteroid. They want to cut social programs for purely ideological reasons. After spending much of the past decade borrowing from, among other places, the Social Security trust fund to pay for massive tax cuts and bank bailouts, America’s wealthy are now turning around and demanding both $5.7 trillion in new tax breaks and significant cuts to things like Social Security, which incidentally is self-funding and running a huge surplus.

WRONG! No one “borrowed from the Social Security trust fund.” Nor is Social Security “self-funding.” Nor is it “running a surplus.”

Let’s state yet again that money is not physical. Money is purely digital. It only exists in the computerized accounts of banks. (Currency coins and bills are merely claims to digital values.)

Banks and the US government both create money by changing the numbers in accounts. Banks create money as loans. The US government creates money as debt-free spending.

Since money is not physical, there is no need for the US government to “borrow” from “trust funds.” Nor does Social Security have a “surplus.” Government money is created the moment an account is credited.

In the illustration below, we create a million dollars. Note that there is no “surplus.” There are only electronic numbers. This is how the money system operates.

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It’s just like a sports scoreboard. It needs no “surplus” of points, nor does it need to “borrow” points from another scoreboard. To change the score, the scoreboard simply changes the numbers.

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Then Taibbi hits the truth pin again…

It’s easy to claim that Social Security is driving the deficit, or that the U.S. will imminently become insolvent “like Greece” (it can’t, for the simple reason that it has its own currency, while Greece’s debts are in Euros) when the public’s baseline knowledge level is zero.

Afterward Taibbi correctly notes that no one is squawking about the Fed’s quantitative easing, in which the Fed creates $85 billion per month, and uses it to buy things like Treasuries and mortgage-backed securities. Taibbi correctly notes that quantitative easing does nothing for the real economy.

QE is pure financial steroids. It’s stimulus on a much bigger scale than Obama’s recovery program, it’s open-ended, and it’s not voted upon.

It is only a stimulus for the financial economy, not the real economy. QE consists of adding to bank reserves, which cannot be spent like regular money. Banks used their augmented reserves to backstop the banks’ speculation in the markets.

In fact, apart from the fact that the Fed chairman is nominated by the president, the actions of the central bank are not merely undemocratic but intensely secret, with minutes of its Federal Open Markets Committee only released three weeks after decisions are made.

True, but regular government spending is under control of the US Congress and President, not the Fed.

QE is designed to stimulate employment, but after many years and trillions of dollars, there’s been little growth in the economy.

No, QE is not designed to stimulate employment, since it does not cause money to circulate in the real economy. QE is designed to juice the markets (e.g. the stock market).

Matt Taibbi has a partial glimpse of reality. If he could understand that money is not physical, he might go all the way.

http://www.rollingstone.com/politics/news/the-mad-science-of-the-national-debt-20130522#ixzz2UGcyTzMY

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bridge collapse

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Fortunately no one died in Thursday’s disaster. Nor has anyone died in any of the six major U.S. bridge failures since the collapse of the I-35 bridge in Minneapolis killed 13 people in August 2007. That’s a miracle, considering there are thousands of unsound bridges in the U.S. and a dwindling amount of money being spent to fix them — because of austerity. As The Atlantic’s Philip Bump points out, infrastructure spending as a percentage of GDP has tumbled to its lowest level in at least 20 years.

Dave Johnson of the “Campaign for America’s Future” demonstrates the stupidity that maintains austerity. Mr. Johnson wants the federal government to fix America’s infrastructure, but he says it this way…

In Seattle another aging bridge has fallen. The American Society of Civil Engineers report America’s 2013 Infrastructure Report Card gives us a D+ and says we are $3.6 trillion behind in infrastructure maintenance. And this is just to catch up, not get ahead.

This work has to be done at some point, but today we have a 10 million person employment gap. And today we can get the money to do this at close to zero percent. We have the double need — it needs doing and we need jobs — and we can get the money almost free.

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The hiring and purchase of American-made materials involved in fixing the infrastructure would bring millions of jobs. It would boost the economy, increase the tax revenue, and decrease safety-net spending.

It would also narrow the gap between the rich and the rest, which is not acceptable.

And when we fix or build a bridge we have the bridge. After we have updated the roads, bridges, electrical systems, dams, airports and everything else that means our economy is much more competitive and efficient. So the benefits continue. Compare that to the supposed benefits of tax cuts. After the tax cuts, you are left with the debt they cause and less revenue with which to pay it off.

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The “debt” is a trivial product of selling T-securities, and is as much an asset as a “debt.” (In England the securities are called “gilts.”) Besides, the federal government can create and spend money for infrastructure repair directly, without selling T-securities. Hence the money is limitless and debt-free.

Furthermore, tax cuts are a relief from austerity. All federal taxes should be cut to zero.  The federal government does  not need or use tax revenue, and the FICA tax does not pay for Social Security or Medicare. What does pay for it? The process of changing numbers in digital bank accounts. That is, the crediting of accounts.

WTF is the matter with Republicans, that they won’t even let us maintain the country’s infrastructure? They call it “just more government spending.” In fact they force this sequester of cuts, and demand even more cuts!

It’s called widening the gap between the rich and the rest. It is sustained by your refusal to accept the facts regarding government finances.

http://blog.ourfuture.org/20130524/another-bridge-falls-yet-fixing-infrastructure-fixes-jobs-and-deficits

austerity_demon

Two days before the bridge collapsed in Washington state, a “sinkhole” suddenly appeared in Washington D.C. three blocks from the White House. It is double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897.

One writer says this:

There is an idiocy about our current national politics that is simply stupefying. We sit watching, and suffering, as our nation disintegrates into a run-down backwater. Our airports are a disgrace. Our railroads, broadband, energy grid are outmoded by international standards. A bridge falls every other day. Our sewage systems are overwhelmed by normal use, and collapse in extreme weather that has become the national norm. Sinkholes are now a life-threatening peril.

At the same time, over 20 million people are in need of full-time work. The construction industry has still not recovered from the housing collapse. The federal government can borrow money at interest rates near zero. Yet instead of grabbing this opportunity to rebuild the country, Washington is focused on cutting budgets, an austerity that clearly costs jobs and impedes the recovery.

The madness continues because people like you smugly reject the facts. The federal government doesn’t need to borrow at all.  

Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future.

Better yet, why not create money out of thin air? The federal government already does that every day. So do banks when they make loans.

At the top of his wish list for the economy is borrowing money to invest in roads and infrastructure. The resulting growth will more than repay the virtually free money. We’ll end up with a more competitive economy, a healthier and modern infrastructure that will make lives easier and safer, more jobs, more income, more taxes and less debt.

Great. More taxes — i.e. more austerity. And if you want less “debt,” then tell the Treasury to stop selling securities. The Treasury sells them by choice, not necessity.

A functional Congress would create a national infrastructure bank, designed to make vital investments in rebuilding the country. It could issue bonds that the Federal Reserve would purchase with interest rates near zero. If the Fed spend $20 billion on infrastructure bonds, it would help insure against blowing up the next bubble, while actually employing people doing work that has to be done.

The federal government already “issues bonds that the Federal Reserve purchases with interest rates near zero.” But why sell bonds in the first place?  Why not issue the money directly, like the government does with Social Security benefits?

Now here’s a reasonable comment…

“Internal improvements” used to have conservative support. Alexander Hamilton championed them. So did the Whigs under Henry Clay. Republican Abe Lincoln built the transcontinental railroads and the land grant colleges; Eisenhower the interstate highways. A lot of money was wasted. A lot of insiders got rich. But the country benefited from creating a modern, increasingly efficient infrastructure. Now the need is pressing. The work is needed. It is simply idiotic that the Congress refuses to act.

Everyone and everything exists to serve the rich, the bankers, and Wall Street. We’re finished as a nation.

Repairing roads and rail, building modern airports, keeping our broadband and energy grid at world class standards, making sure the sewers don’t leak, strengthening the sinews for the extreme weather that is upon us – this isn’t an ideological question. It is just common sense.

But what is common sense compared to austerity mania?

http://blog.ourfuture.org/20130523/washingtons-literal-sinkhole-and-our-idiotic-fixation-on-deficits

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From the web page above:

America’s debt now tops $16 trillion, and the meter never stops running. The national debt increases by about $35 million an hour, and around $2 billion every 24 hours.

As the country’s debt skyrockets, politicians and pundits are debating how to get it under control. If nothing is done, we could be $17 trillion in the hole later this year.

So what? The Fed can pay off the “national debt” at any time, simply by changing the numbers in its T-security accounts. (Yes, it’s that easy). The “debt” is merely the amount of outstanding T-securities the Treasury has sold by choice (not necessity). When investors buy T-securities, they lend their money to the Fed, just as you lend your money to a bank when you make a deposit into your account. The bank considers your deposits to be a liability (a debt) and an asset (a credit). Likewise the $16.7 trillion the investors spent to buy T-securities is both a “national debt” and a “national asset.”

The Fed pays interest to the buyers of T-securities by crediting the holders’ accounts with the Fed. No individual person in the USA owes this debt, or will ever be asked to pay it.

For the first time in six years, the federal government said it would make a small down payment on the national debt – about $35 billion worth. They say higher tax receipts and recent spending cuts helped raise the money.

Bullshit!

[1] Interest on T-securities is paid by the Fed, not by the regular government. All the regular government can do is order the Fed and other banks to change the numbers in their customers’ accounts (i.e. credit or debit them, augment or diminish them).

[2] Various Treasury securities have maturities ranging from 30 days to 30 years. The Fed will not “pay down” a 30-year bond in advance of its maturity. There is no need to “pay down the debt” anyway. Besides, the Fed could pay all of it off at any time.

[3] Higher tax receipts and recent spending cuts have nothing to do with the Fed paying interest on Treasuries. The Fed does not need tax revenue to pay interest. Money is all digital, remember? To pay interest, the Fed simply changes the numbers in accounts.

The national debt is the amount of money the U-S government has borrowed to pay its bills. It exists because the government’s expenses exceed its revenues. So to pay the bills, the government borrows money from countries like Japan, China, Brazil and other places.

Whoa! MAJOR BULLSHIT!!

The U.S. government does not “borrow to pay its bills.” Nor does the government get any of its money from Japan, China, Brazil and other places. The government digitally creates money and spends it by ordering banks to credit accounts. The sale of T-securities is a side issue, and has no connection with the government’s ability to spend (i.e. ability to credit accounts).

The U.S. federal government is not like a person, a family, a business, a company, or a state, county, or municipal government. Reason: the federal government alone has the authority to create money from nothing, by ordering banks to credit accounts. All other entities must obtain money from outside themselves – except for banks, which create loan money by changing the numbers in accounts.

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Surprisingly enough, we owe most of the money to ourselves. 66% of the national debt is owned by U-S entities like, the Federal Reserve, Social Security, various pension plans, banks and individual investors.

Why is that surprising? Because you believe the lies? Also, if I owe money to myself, then why do you say I have a “debt crisis”?

Our $16 trillion debt could be paid off in a year. But in order for that to happen, the government would have to stop spending completely and raise taxes at least 10% across the board. The money generated would go directly to paying down the debt.

B-u-l-l-l-l-l-l-SHIT! The Fed can easily and instantly pay off the entire national debt, any time it wants, simply by changing the numbers in bank accounts. The Fed and the regular government already do this constantly, every day. Money is merely a system of digital credits and debits.

http://finance.yahoo.com/blogs/just-explain-it/just-explain-long-payoff-u-debt-145729149.html?vp=1

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4 Responses to 25 May 2013

  1. Steve says:

    Nightly round-up of internet economic “expert” commentators:

    1. “yes,let’s keep printing money” (KEY knee-jerk condescending comment from typical Austrian moron)
    2. “counterfeiting” (Austrian buzzword that means absolutely nothing)
    3. “law of scarcity” (oh, those Austrians,..)

    4. “let’s increase taxes on the wealthy to 90% and redistribute the $$ to infrastructure projects benefiting the Middle class…” (yeah, taking more dollars out of the economy grows the economy)
    5. “We, as Americans, better get used to austerity, and put our greed and self-centered attitude behind us; that is, if we want this country to be prosperous again”.(Yes! let’s blame the poor bastards and make them even poorer!)

    6. “austerity WILL allow businesses to have more money to invest” (What?)
    7. “More governmental spending creates more uncertainty and continued high unemployment.”(don’t worry Boehner said it, I read it somewhere)
    8. “You should get with the American program and realize that history proves that significant spending cuts creates economic prosperity” (just more …CON bullshit)
    9.. “S10k/sec in government debt!” (What happened to the S10k/sec ASSETS part, brain dead?)

    Hip boots are now off. NO one believes me when I tell them that infrastructure “spending” is free, all done on that miracle money maker finger/keystroke thingy, either.

  2. Steve says:

    Ill-informed Americans begging for their own economic suicide. They demand it.The upper 1% couldn’t be happier.

  3. Jerry B says:

    Is it weakness of intellect that causes most politicians and economists to lie, or is it the austerity poison that fills their insides?

    • quatloosx says:

      Neither. Bankers and rich people pay politicians and economists to lie, since lying widens the gap between the 1% and 99%. “Economic theory” is dictated by the rich, and is designed to justify the ever-widening wealth gap.

      This scam continues because most people cannot face reality, and because average people use the lies for their own ends. If I am a racist, then I want austerity for people who are not of my race. If I am a neo-Nazi, I want austerity for Blacks and Jews. If I am a Jew, I want austerity for Muslims. If I am a Tea Party moron, I want austerity for immigrants, and for people who are not bible thumpers. If I am a liberal, I want austerity for conservatives, and vice-versa.

      In short, everyone wants austerity for someone else. Hence they ALL get austerity, which further widens the gap between the 1% and 99%, and further increases the power of bankers over the planet. And since most people use lies for their own selfish hate-filled ends, most people smugly reject the truth. Hence, most people remain enslaved and impoverished. This applies to all aspects of life, including money and finances.

      Thanks for visiting and commenting. Please continue to do so.

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